Lev's win before FDA is right prescription for ViroPharma

The New York company that Exton-based ViroPharma Inc. is buying received Food and Drug Administration approval for a drug that treats a rare medical condition.

The FDA approved Cinryze, which is being developed by Lev Pharmaceuticals Inc. to treat those with hereditary angioedema. The condition is also known as C1 inhibitor deficiency.

That's good news for ViroPharma, which in July agreed to acquire Lev in a cash-and-stock deal valued at $442.9 million. Lev shareholders will vote on the deal Oct. 21.

ViroPharma executives believe that the peak sales for Cinryze could be $250 million to $350 million. Analysts who follow the company have been more skeptical. Brian D. Rye, of Janney Montgomery Scott, estimates peak sales at $150 million to $200 million. Jason Kolbert and Brian Skorney, of Susquehanna Financial Group, project peak sales at $127 million.

ViroPharma CEO Vincent Milano told Bloomberg News earlier this month that he's confident that the FDA will grant Cinryze "orphan drug" designation. That would give the company an exclusive market for the drug for seven years.

Given that ViroPharma currently gets all of its sales from one drug, called Vancocin, the Chester County Little Pharma company needs something to diversify its sales base. Vancocin is used to treat an often-deadly infection caused by Clostridium difficile, which has been showing up in hospitals in alarming numbers recently.

ViroPharma has built that cast-off drug from Eli Lilly & Co. into a profitable franchise. The company had net income of $95.4 million on sales of $203.8 million in 2007.

Its profits have dipped during the first two quarters this year as spending on research and development has more than doubled. Its selling, general and administrative expenses also grew to $29 million for the six months ended June 30, from $15.3 million for the same period in 2007.

Hereditary angioedema is a genetic disorder that is severely debilitating and often life-threatening. An estimated 10,000 people in the United States have HAE, which is usually treated with steroids.

Researchers said they didn't observe any serious adverse events in the clinical trials of Cinryze. The most common adverse reactions reported were upper respiratory infection, sinusitis, rash and headache.

Shares of ViroPharma and Lev were both up 13 percent today. News of the FDA approval came after the stock market had closed Friday.